Bill Text: IL SB1534 | 2021-2022 | 102nd General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Illinois Credit Union Act. In provisions concerning service to the economically disadvantaged, provides that members of a targeted population may be admitted to membership in a credit union. Provides that notice of a meeting of credit union members may be posted on the credit union's website. Provides that unless expressly prohibited by the articles of incorporation or bylaws, the board of directors may provide by resolution that members may attend, participate in, act in, and vote at any annual meeting or special meeting through the use of a conference telephone or interactive technology, subject to specified conditions. Sets forth provisions concerning appointment of associate directors. In provisions concerning compensation of officials, provides that if the Department of Financial and Professional Regulation determines the payment of director or committee member compensation creates a safety and soundness issue for a credit union, the Department may take an enforcement action to reduce or suspend the compensation. Provides that the board of directors shall hold regular meetings at least once each month; however, upon approval of an amendment to the bylaws of the credit union, the board of directors may hold meetings less frequently than once each month but at least once each quarter. Provides that a credit union shall select an annual reporting period, complete an external audit report, agreed-upon procedures report, and internal audit report, and deliver copies to the Secretary of Financial and Professional Regulation no later than 120 days after the end of the annual reporting period. In provisions concerning loan programs and provisions concerning investment of funds, allows a credit union to make loans to or invest in credit union service organizations in a total amount not exceeding the greater of 6% (rather than 3%) of specified amounts. Provides that a surviving credit union may identify the merging credit union as a division, branch, unit, or other descriptive reference. Provides that the network credit union board of directors shall require each advisory board member to sign a confidentiality or non-disclosure agreement. Defines "target market". Makes other changes.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed) 2021-06-02 - Rule 19(a) / Re-referred to Rules Committee [SB1534 Detail]

Download: Illinois-2021-SB1534-Introduced.html


102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB1534

Introduced 2/26/2021, by Sen. Antonio Muņoz

SYNOPSIS AS INTRODUCED:
See Index

Amends the Illinois Credit Union Act. In provisions concerning service to the economically disadvantaged, provides that members of a targeted population may be admitted to membership in a credit union. Provides that notice of a meeting of credit union members may be posted on the credit union's website. Provides that unless expressly prohibited by the articles of incorporation or bylaws, the board of directors may provide by resolution that members may attend, participate in, act in, and vote at any annual meeting or special meeting through the use of a conference telephone or interactive technology, subject to specified conditions. Sets forth provisions concerning appointment of associate directors. In provisions concerning compensation of officials, provides that if the Department of Financial and Professional Regulation determines the payment of director or committee member compensation creates a safety and soundness issue for a credit union, the Department may take an enforcement action to reduce or suspend the compensation. Provides that the board of directors shall hold regular meetings at least once each month; however, upon approval of an amendment to the bylaws of the credit union, the board of directors may hold meetings less frequently than once each month but at least once each quarter. Provides that a credit union shall select an annual reporting period, complete an external audit report, agreed-upon procedures report, and internal audit report, and deliver copies to the Secretary of Financial and Professional Regulation no later than 120 days after the end of the annual reporting period. In provisions concerning loan programs and provisions concerning investment of funds, allows a credit union to make loans to or invest in credit union service organizations in a total amount not exceeding the greater of 6% (rather than 3%) of specified amounts. Provides that a surviving credit union may identify the merging credit union as a division, branch, unit, or other descriptive reference. Provides that the network credit union board of directors shall require each advisory board member to sign a confidentiality or non-disclosure agreement. Defines "target market". Makes other changes.
LRB102 10353 BMS 15680 b

A BILL FOR

SB1534LRB102 10353 BMS 15680 b
1 AN ACT concerning regulation.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Illinois Credit Union Act is amended by
5changing Sections 16.1, 19, 23, 29, 34, 51, 57, 59, and 64.7
6and by adding Section 20.5 as follows:
7 (205 ILCS 305/16.1)
8 Sec. 16.1. Service to the economically disadvantaged.
9 (a) Persons who reside in investment areas or persons who
10are members of a targeted population, as defined in the
11Community Development Banking and Financial Institutions Act
12of 1994 (12 U.S.C. 4701 et seq. 4702) and regulations issued
13thereunder identified by the U.S. Department of the Treasury
14(12 CFR 1805.104 et seq.), may be admitted to membership in a
15credit union that determines to serve serves the investment
16area or members of the targeted population, or both by
17maintaining a facility in the area. The credit union may serve
18the investment area or members of the targeted population, or
19both, directly or indirectly or through borrowers or investees
20that respectively serve the investment area or the members of
21the targeted population, or both.
22 (b) As used in For purposes of this Section, "target
23market" means an investment area or a targeted population, or

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1both, as defined under the U.S. Department of the Treasury
2regulations identified in subsection (a). a "facility" means a
3credit union owned branch, a shared branch, an office operated
4on a regularly scheduled weekly basis, or a credit union owned
5electronic facility that meets, at a minimum, the requirements
6of accepting shares for members' accounts, accepting loan
7applications and disbursing loans, but does not include an
8ATM.
9 (c) (b) Credit unions desiring to serve the economically
10disadvantaged in accordance with this Section shall do so
11pursuant to a written business plan that shall document the
12fact that the target market area meets the criteria of this
13Section, identify the credit and depository needs of the
14target market area, identify the services to be delivered, and
15describe the manner in which the services will be delivered.
16The credit union shall regularly review the business plan to
17determine whether the target market area is being adequately
18served and shall provide to the Secretary periodic service
19status reports that describe how the needs of the target
20market area are being met.
21(Source: P.A. 97-133, eff. 1-1-12.)
22 (205 ILCS 305/19) (from Ch. 17, par. 4420)
23 Sec. 19. Meeting of members.
24 (1)(a) The annual meeting shall be held each year during
25the months of January, February or March or such other month as

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1may be approved by the Department. The meeting shall be held at
2the time, place and in the manner set forth in the bylaws. Any
3special meetings of the members of the credit union shall be
4held at the time, place and in the manner set forth in the
5bylaws. Unless otherwise set forth in this Act, quorum
6requirements for meetings of members shall be established by a
7credit union in its bylaws. Notice of all meetings must be
8given by the secretary of the credit union at least 7 days
9before the date of such meeting, either by handing a written or
10printed notice to each member of the credit union, by mailing
11the notice to the member at his address as listed on the books
12and records of the credit union, or by posting a notice of the
13meeting in three conspicuous places, including the office of
14the credit union, by posting the notice of the meeting on the
15credit union's website, or by disclosing the notice of the
16meeting in membership newsletters or account statements.
17 (b) Unless expressly prohibited by the articles of
18incorporation or bylaws and subject to applicable requirements
19of this Act, the board of directors may provide by resolution
20that members may attend, participate in, act in, and vote at
21any annual meeting or special meeting through the use of a
22conference telephone or interactive technology, including, but
23not limited to, electronic transmission, internet usage, or
24remote communication, by means of which all persons
25participating in the meeting can communicate with each other.
26Participation through the use of a conference telephone or

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1interactive technology shall constitute attendance, presence,
2and representation in person at the annual meeting or special
3meeting of the person or persons so participating and count
4towards the quorum required to conduct business at the
5meeting. The following conditions shall apply to any virtual
6meeting of the members:
7 (i) the credit union must internally possess or retain
8 the technological capacity to facilitate virtual meeting
9 attendance, participation, communication, and voting; and
10 (ii) the members must receive notice of the use of a
11 virtual meeting format and appropriate instructions for
12 joining, participating, and voting during the virtual
13 meeting at least 7 days before the virtual meeting.
14 (2) On all questions and at all elections, except election
15of directors, each member has one vote regardless of the
16number of his shares. There shall be no voting by proxy except
17on the election of directors, proposals for merger or
18voluntary dissolution. Members may vote on questions,
19including, without limitation, the approval of mergers and
20voluntary dissolutions under this Act, and in elections by
21secure electronic record if approved by the board of
22directors. All voting on the election of directors shall be by
23ballot, but when there is no contest, written or electronic
24ballots need not be cast. The record date to be used for the
25purpose of determining which members are entitled to notice of
26or to vote at any meeting of members, may be fixed in advance

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1by the directors on a date not more than 90 days nor less than
210 days prior to the date of the meeting. If no record date is
3fixed by the directors, the first day on which notice of the
4meeting is given, mailed or posted is the record date.
5 (3) Regardless of the number of shares owned by a society,
6association, club, partnership, other credit union or
7corporation, having membership in the credit union, it shall
8be entitled to only one vote and it may be represented and have
9its vote cast by its designated agent acting on its behalf
10pursuant to a resolution adopted by the organization's board
11of directors or similar governing authority; provided that the
12credit union shall obtain a certified copy of such resolution
13before such vote may be cast.
14 (4) A member may revoke a proxy by delivery to the credit
15union of a written statement to that effect, by execution of a
16subsequently dated proxy, by execution of a secure electronic
17record, or by attendance at a meeting and voting in person.
18 (5) As used in this Section, "electronic" and "electronic
19record" have the meanings ascribed to those terms in the
20Electronic Commerce Security Act. As used in this Section,
21"secured electronic record" means an electronic record that
22meets the criteria set forth in Section 10-105 of the
23Electronic Commerce Security Act.
24(Source: P.A. 100-361, eff. 8-25-17.)
25 (205 ILCS 305/20.5 new)

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1 Sec. 20.5. Appointment of associate directors.
2 (a) The board of directors of a credit union may, in its
3discretion, appoint one or more associate directors to serve
4in an advisory capacity. The board shall prescribe the duties
5of an associate director and the manner in which associate
6directors are appointed and removed. The board shall not
7delegate to associate directors any of the duties or
8responsibilities prescribed by this Act or other applicable
9law to be performed by directors duly elected by their
10members. An associate director shall not be deemed or
11considered to be a director for any purpose under this Act.
12 (b) Before appointing an associate director, the board
13shall confirm that the person meets all of the requirements to
14serve as a director, including, without limitation, a working
15familiarity with the financial and accounting practices of the
16credit union as set forth in subsection (c) of Section 30.
17 (c) An associate director may participate in meetings of
18the board but may not vote or otherwise act as a director. With
19respect to any issue that comes before the board for
20deliberation, the board may request that all associate
21directors excuse themselves from the meeting of the board and
22the associate directors shall immediately comply with the
23request.
24 (d) The board shall require each associate director to
25sign a confidentiality or non-disclosure agreement to ensure
26that information concerning the credit union remains

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1confidential.
2 (205 ILCS 305/23) (from Ch. 17, par. 4424)
3 Sec. 23. Compensation of officials.
4 (1) Directors and committee members may receive reasonable
5compensation for their service as such, the amount of which
6shall be set by the board of directors, in accordance with
7written policies and procedures established by the board of
8directors. If the Department determines the payment of
9director or committee member compensation, or both, creates a
10safety and soundness issue for a credit union, the Department
11shall utilize the standards set forth in 38 Ill. Adm. Code
12190.25 and supplemental guidelines to address and resolve the
13issue. An enforcement action taken pursuant to 38 Ill. Adm.
14Code 190.25 and guidelines and specified by the Act shall be
15used to reduce or suspend the compensation paid to the
16directors and committee members. The Department shall, by
17rule, establish maximum rates of reasonable compensation that
18are generally applicable to credit unions considering factors
19the Department may establish from time to time, including, but
20not limited to, total assets, nonprofit cooperative structure,
21and the best interests of members. "Compensation" as used in
22this subsection (1) refers to remuneration expense to the
23credit union for services provided by a director or committee
24member in his or her capacity as director or committee member.
25The remuneration expense is in the form of monetary payments

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1and shall be disclosed on an annual basis to the membership in
2the financial statement that is part of the annual membership
3meeting materials. The disclosure shall contain: (i) the
4amount paid to each director and (ii) the amount paid to the
5directors as a group. "Compensation" does not include any of
6the expenses described in subsections (2) and (3) of this
7Section.
8 (2) The credit union may incur the expense of providing
9reasonable life, health, accident, and similar insurance
10protection benefits for directors and committee members.
11 (3) Directors, committee members and employees, while on
12official business of the credit union, may be reimbursed for
13reasonable and necessary expenses. Alternatively, the credit
14union may make direct payment to a third party for such
15business expenses. Reasonable and necessary expenses may
16include the payment of travel costs for the foregoing
17officials and one guest per official. All payment of costs
18shall be made in accordance with written policies and
19procedures established by the board of directors.
20 (4) The board of directors may establish compensation for
21officers of the credit union.
22(Source: P.A. 101-567, eff. 8-23-19.)
23 (205 ILCS 305/29) (from Ch. 17, par. 4430)
24 Sec. 29. Meetings of directors.
25 (1) The board of directors shall meet as often as

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1necessary as prescribed in the bylaws. The board of directors
2shall hold regular meetings at least once each month; however,
3upon approval of an amendment to the bylaws of the credit
4union, the board of directors may hold meetings less
5frequently than once each month but at least once each
6quarter. The board of directors may meet quarterly without the
7prior approval of the Secretary if an executive committee has
8been appointed by the board of directors and the executive
9committee meets in each month that the board of directors does
10not meet. A special meeting of the board of directors may be
11held as provided in the bylaws. The board of directors and the
12executive committee shall meet as often as necessary, but one
13body must meet at least monthly and the other at least
14quarterly, as prescribed in the bylaws. Unless a greater
15number is required by the bylaws, a majority of the whole board
16of directors shall constitute a quorum. The act of a majority
17of the directors present at a meeting at which a quorum is
18present shall be the act of the board of directors unless the
19act of a greater number is required by this Act, the credit
20union's articles of incorporation or the bylaws.
21 (2) Unless specifically prohibited by the articles of
22incorporation or bylaws, directors and committee members may
23participate in and act at any meeting of the board or committee
24through the use of a conference telephone or other
25communications equipment by means of which all persons
26participating in the meeting can communicate with each other.

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1Participation in the meeting shall constitute attendance and
2presence in person at the meeting of the person or persons so
3participating.
4 (3) Unless specifically prohibited by the articles of
5incorporation or bylaws, any action required by this Act to be
6taken at a meeting of the board of directors or a committee and
7any other action that may be taken at a meeting of the board of
8directors or a committee may be taken without a meeting if a
9consent in writing setting forth the action taken is signed by
10all the directors entitled to vote with respect to the subject
11matter thereof, or by all members of the committee, as the case
12may be. The consent shall be evidenced by one or more written
13approvals, each of which sets forth the action taken and bears
14the signatures of one or more directors or committee members.
15All the approvals evidencing the consent shall be delivered to
16the secretary to be filed in the corporate records of the
17credit union. The action taken shall be effective when all the
18directors or committee members have approved the consent
19unless the consent specifies a different effective date. A
20consent signed by all the directors or all the members of a
21committee shall have the same effect as a unanimous vote, and
22may be stated as such in any document filed with the director
23under this Act.
24(Source: P.A. 89-603, eff. 8-2-96.)
25 (205 ILCS 305/34) (from Ch. 17, par. 4435)

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1 Sec. 34. Duties of supervisory committee.
2 (1) The supervisory committee shall make or cause to be
3made an annual internal audit of the books and affairs of the
4credit union to determine that the credit union's accounting
5records and reports are prepared promptly and accurately
6reflect operations and results, that internal controls are
7established and effectively maintained to safeguard the assets
8of the credit union, and that the policies, procedures and
9practices established by the board of directors and management
10of the credit union are being properly administered. The
11supervisory committee shall submit a report of that audit to
12the board of directors and a summary of that report to the
13members at the next annual meeting of the credit union. It
14shall make or cause to be made such supplementary audits as it
15deems necessary or as are required by the Secretary or by the
16board of directors, and submit reports of these supplementary
17audits to the Secretary or board of directors as applicable.
18If the supervisory committee has not engaged a licensed
19certified public accountant or licensed certified public
20accounting firm to make the internal audit, the supervisory
21committee or other officials of the credit union shall not
22indicate or in any manner imply that such audit has been
23performed by a licensed certified public accountant or
24licensed certified public accounting firm or that the audit
25represents the independent opinion of a licensed certified
26public accountant or licensed certified public accounting

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1firm. The supervisory committee must retain its tapes and
2working papers of each internal audit for inspection by the
3Department. The report of this audit must be made on a form
4approved by the Secretary. A copy of the report must be
5promptly delivered to the Secretary.
6 (2) The supervisory committee shall make or cause to be
7made at least once each year a reasonable percentage
8verification of members' share and loan accounts, consistent
9with rules promulgated by the Secretary.
10 (3) (A) The supervisory committee of a credit union with
11assets of $10,000,000 or more shall engage a licensed
12certified public accountant or licensed certified public
13accounting firm to perform an annual external independent
14audit of the credit union's financial statements in accordance
15with generally accepted auditing standards and the financial
16statements shall be issued in accordance with accounting
17principles generally accepted in the United States of America.
18 (B) The supervisory committee of a credit union with
19assets of $5,000,000 or more, but less than $10,000,000, shall
20engage a licensed certified public accountant or licensed
21certified public accounting firm to perform on an annual
22basis: (i) an agreed-upon procedures engagement under
23attestation standards established by the American Institute of
24Certified Public Accountants to minimally satisfy the
25supervisory committee internal audit standards set forth in
26subsection (1); or (ii) an external independent audit of the

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1credit union's financial statements pursuant to the standards
2set forth in paragraph (A) of subsection (3).
3 (C) Notwithstanding anything to the contrary in Section 6,
4each credit union organized under this Act shall select the
5annual period it desires to use for purposes of performing the
6external audit, agreed-upon procedures report, or internal
7audit described in this Section. The annual period may end on
8the final day of any month. Irrespective of the annual period
9selected, the credit union shall complete its external audit
10report, agreed-upon procedures report, or internal audit
11report and deliver copies to the Secretary no later than 120
12days after the end of the annual period selected for which the
13reports were prepared. The external independent audit report
14or agreed-upon procedures report shall be completed and a copy
15thereof delivered to the Secretary no later than 120 days
16after the end of the calendar or fiscal year under audit or
17fiscal period for which the agreed-upon procedures are
18performed. A credit union or group of credit unions may obtain
19an extension of the due date upon application to and receipt of
20written approval from the Secretary.
21 (D) If the credit union engages a licensed certified
22public accountant or licensed certified public accounting firm
23to perform an annual external independent audit of the credit
24union's financial statements pursuant to the standards in
25paragraph (A) of subsection (3) or an annual agreed-upon
26procedures engagement pursuant to the standards in paragraph

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1(B) of subsection (3), then the annual internal audit
2requirements of subsection (1) shall be deemed satisfied and
3met in all respects.
4 (4) In determining the appropriate balance in the
5allowance for loan losses account, a credit union may
6determine its historical loss rate using a defined period of
7time of less than 5 years, provided that:
8 (A) the methodology used to determine the defined
9 period of time is formally documented in the credit
10 union's policies and procedures and is appropriate to the
11 credit union's size, business strategy, and loan portfolio
12 characteristics and the economic environment of the areas
13 and employers served by the credit union;
14 (B) supporting documentation is maintained for the
15 technique used to develop the credit union loss rates,
16 including the period of time used to accumulate historical
17 loss data and the factors considered in establishing the
18 time frames; and
19 (C) the external auditor conducting the credit union's
20 financial statement audit has analyzed the methodology
21 employed by the credit union and concludes that the
22 financial statements, including the allowance for loan
23 losses, are fairly stated in all material respects in
24 accordance with U.S. Generally Accepted Accounting
25 Principles, as promulgated by the Financial Accounting
26 Standards Board.

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1 (5) A majority of the members of the supervisory committee
2shall constitute a quorum.
3 (6) On an annual basis commencing January 1, 2015, the
4members of the supervisory committee shall receive training
5related to their statutory duties. Supervisory committee
6members may receive the training through internal credit union
7training, external training offered by the credit union's
8retained auditors, trade associations, vendors, regulatory
9agencies, or any other sources or on-the-job experience, or a
10combination of those activities. The training may be received
11through any medium, including, but not limited to,
12conferences, workshops, audit closing meetings, seminars,
13teleconferences, webinars, and other Internet-based delivery
14channels.
15(Source: P.A. 100-778, eff. 8-10-18; 101-81, eff. 7-12-19.)
16 (205 ILCS 305/51) (from Ch. 17, par. 4452)
17 Sec. 51. Other loan programs.
18 (1) Subject to such rules and regulations as the Secretary
19may promulgate, a credit union may participate in loans to
20credit union members jointly with other credit unions,
21corporations, or financial institutions. An originating credit
22union may originate loans only to its own members. A
23participating credit union that is not the originating lender
24may participate in loans made to its own members or to members
25of another participating credit union. "Originating lender"

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1means the participating credit union with which the member
2contracts. A master participation agreement must be properly
3executed, and the agreement must include provisions for
4identifying, either through documents incorporated by
5reference or directly in the agreement, the participation loan
6or loans prior to their sale.
7 (2) Any credit union with assets of $500,000 or more may
8loan to its members under scholarship programs which are
9subject to a federal or state law providing 100% repayment
10guarantee.
11 (3) A credit union may purchase the conditional sales
12contracts, notes and similar instruments which evidence an
13indebtedness of its members. In the management of its assets,
14liabilities, and liquidity, a credit union may purchase the
15conditional sales contracts, notes, and other similar
16instruments that evidence the consumer indebtedness of the
17members of another credit union. "Consumer indebtedness" means
18indebtedness incurred for personal, family, or household
19purposes.
20 (4) With approval of the board of directors, a credit
21union may make loans, either on its own or jointly with other
22credit unions, corporations or financial institutions, to
23credit union organizations; provided, that the aggregate
24amount of all such loans outstanding shall not at any time
25exceed the greater of 6% 3% of the paid-in and unimpaired
26capital and surplus of the credit union or the amount

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1authorized for federal credit unions.
2 (5) With the approval of the board of directors, a credit
3union may make loans, either on its own or jointly with other
4credit unions, corporations, or financial institutions, to
5community development financial institutions as defined in
6regulations issued by the U.S. Department of the Treasury and
7minority deposit institutions as defined by the National
8Credit Union Administration. The aggregate amount of all such
9loans outstanding shall not at any time exceed 5% of the
10paid-in and unimpaired capital and surplus of the credit
11union.
12(Source: P.A. 97-133, eff. 1-1-12.)
13 (205 ILCS 305/57) (from Ch. 17, par. 4458)
14 Sec. 57. Group purchasing and marketing.
15 (a) A credit union may, consistent with rules and
16regulations promulgated by the Secretary, enter into
17cooperative marketing arrangements to facilitate its members'
18voluntary purchase of such goods and services as are in the
19interest of improving economic and social conditions of the
20members.
21 (b) A credit union may create and use descriptive and
22brand references to promote and market its identity, services,
23and products to its members. In the case of a merger pursuant
24to Section 63, the surviving credit union may identify the
25merging credit union as a division, branch, unit, or other

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1descriptive reference that ensures the members understand they
2are dealing with one credit union rather than multiple credit
3unions, as of the effective date of the merger.
4(Source: P.A. 100-361, eff. 8-25-17.)
5 (205 ILCS 305/59) (from Ch. 17, par. 4460)
6 Sec. 59. Investment of funds.
7 (a) Funds not used in loans to members may be invested,
8pursuant to subsection (7) of Section 30 of this Act, and
9subject to Departmental rules and regulations:
10 (1) In securities, obligations or other instruments of
11 or issued by or fully guaranteed as to principal and
12 interest by the United States of America or any agency
13 thereof or in any trust or trusts established for
14 investing directly or collectively in the same;
15 (2) In obligations of any state of the United States,
16 the District of Columbia, the Commonwealth of Puerto Rico,
17 and the several territories organized by Congress, or any
18 political subdivision thereof; however, a credit union may
19 not invest more than 10% of its unimpaired capital and
20 surplus in the obligations of one issuer, exclusive of
21 general obligations of the issuer, and investments in
22 municipal securities must be limited to securities rated
23 in one of the 4 highest rating categories by a nationally
24 recognized statistical rating organization;
25 (3) In certificates of deposit or passbook type

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1 accounts issued by a state or national bank, mutual
2 savings bank or savings and loan association; provided
3 that such institutions have their accounts insured by the
4 Federal Deposit Insurance Corporation or the Federal
5 Savings and Loan Insurance Corporation; but provided,
6 further, that a credit union's investment in an account in
7 any one institution may exceed the insured limit on
8 accounts;
9 (4) In shares, classes of shares or share certificates
10 of other credit unions, including, but not limited to
11 corporate credit unions; provided that such credit unions
12 have their members' accounts insured by the NCUA or other
13 approved insurers, and that if the members' accounts are
14 so insured, a credit union's investment may exceed the
15 insured limit on accounts;
16 (5) In shares of a cooperative society organized under
17 the laws of this State or the laws of the United States in
18 the total amount not exceeding 10% of the unimpaired
19 capital and surplus of the credit union; provided that
20 such investment shall first be approved by the Department;
21 (6) In obligations of the State of Israel, or
22 obligations fully guaranteed by the State of Israel as to
23 payment of principal and interest;
24 (7) In shares, stocks or obligations of other
25 financial institutions in the total amount not exceeding
26 5% of the unimpaired capital and surplus of the credit

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1 union;
2 (8) In federal funds and bankers' acceptances;
3 (9) In shares or stocks of Credit Union Service
4 Organizations in the total amount not exceeding the
5 greater of 6% 3% of the unimpaired capital and surplus of
6 the credit union or the amount authorized for federal
7 credit unions;
8 (10) In corporate bonds identified as investment grade
9 by at least one nationally recognized statistical rating
10 organization, provided that:
11 (i) the board of directors has established a
12 written policy that addresses corporate bond
13 investment procedures and how the credit union will
14 manage credit risk, interest rate risk, liquidity
15 risk, and concentration risk; and
16 (ii) the credit union has documented in its
17 records that a credit analysis of a particular
18 investment and the issuing entity was conducted by the
19 credit union, a third party on behalf of the credit
20 union qualified by education or experience to assess
21 the risk characteristics of corporate bonds, or a
22 nationally recognized statistical rating agency before
23 purchasing the investment and the analysis is updated
24 at least annually for as long as it holds the
25 investment;
26 (11) To aid in the credit union's management of its

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1 assets, liabilities, and liquidity in the purchase of an
2 investment interest in a pool of loans, in whole or in part
3 and without regard to the membership of the borrowers,
4 from other depository institutions and financial type
5 institutions, including mortgage banks, finance companies,
6 insurance companies, and other loan sellers, subject to
7 such safety and soundness standards, limitations, and
8 qualifications as the Department may establish by rule or
9 guidance from time to time;
10 (12) To aid in the credit union's management of its
11 assets, liabilities, and liquidity by receiving funds from
12 another financial institution as evidenced by certificates
13 of deposit, share certificates, or other classes of shares
14 issued by the credit union to the financial institution;
15 and
16 (13) In the purchase and assumption of assets held by
17 other financial institutions, with approval of the
18 Secretary and subject to any safety and soundness
19 standards, limitations, and qualifications as the
20 Department may establish by rule or guidance from time to
21 time; and .
22 (14) In the shares, stocks, or obligations of
23 community development financial institutions as defined in
24 regulations issued by the U.S. Department of the Treasury
25 and minority deposit institutions as defined by the
26 National Credit Union Administration; the aggregate amount

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1 of all such investments shall not at any time exceed 5% of
2 the paid-in and unimpaired capital and surplus of the
3 credit union.
4 (b) As used in this Section:
5 "Political subdivision" includes, but is not limited to,
6counties, townships, cities, villages, incorporated towns,
7school districts, educational service regions, special road
8districts, public water supply districts, fire protection
9districts, drainage districts, levee districts, sewer
10districts, housing authorities, park districts, and any
11agency, corporation, or instrumentality of a state or its
12political subdivisions, whether now or hereafter created and
13whether herein specifically mentioned or not.
14 "Financial institution" includes any bank, savings bank,
15savings and loan association, or credit union established
16under the laws of the United States, this State, or any other
17state.
18 (c) A credit union investing to fund an employee benefit
19plan obligation is not subject to the investment limitations
20of this Act and this Section and may purchase an investment
21that would otherwise be impermissible if the investment is
22directly related to the credit union's obligation under the
23employee benefit plan and the credit union holds the
24investment only for so long as it has an actual or potential
25obligation under the employee benefit plan.
26 (d) If a credit union acquires loans from another

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1financial institution or financial-type institution pursuant
2to this Section, the credit union shall be authorized to
3provide loan servicing and collection services in connection
4with those loans.
5(Source: P.A. 100-361, eff. 8-25-17; 100-778, eff. 8-10-18;
6101-567, eff. 8-23-19.)
7 (205 ILCS 305/64.7)
8 Sec. 64.7. Network credit unions.
9 (a) Two or more credit unions merging pursuant to Section
1063 of this Act may elect to request a network credit union
11designation for the surviving credit union from the Secretary.
12The request shall be set forth in the plan of merger and
13certificate of merger executed by the credit unions and
14submitted to the Secretary pursuant to subsection (4) of
15Section 63. The Secretary's approval of a certificate of
16merger containing a network credit union designation request
17shall constitute approval of the use of the network
18designation as a brand or other identifier of the surviving
19credit union. If the surviving credit union desires to include
20the network designation in its legal name, make any other
21change to its legal name, or both, it shall proceed with an
22amendment to the articles of incorporation and bylaws of the
23surviving credit union pursuant to Section 4 of this Act.
24 (b) A network credit union is a cooperative business
25structure comprised of 2 or more merging credit unions with a

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1collective goal of efficiently serving their combined
2membership and gaining economies of scale through common
3vision, strategy and initiative. The merging credit unions
4shall be identified as divisional credit unions, branches, or
5units of the network credit union or by other descriptive
6references that ensure the members understand they are dealing
7with one credit union rather than multiple credit unions.
8Descriptive and brand references may also be created and used
9to promote the identity, services, and products of the network
10credit union to its members.
11 (c) Each divisional credit union may have an advisory
12board of directors and a chief management official to assist
13in maintaining and leveraging its respective local identity
14for the benefit of the surviving credit union. The divisional
15credit union advisory boards shall be appointed by the network
16credit union board of directors. Each divisional credit
17union's advisory board of directors may appoint a divisional
18credit union chief management official and may also appoint
19one of its directors to serve on the network credit union's
20nominating committee. A divisional credit union may determine
21to identify its advisory board as a committee and its
22divisional chief management official with a title it deems
23reasonable and appropriate. The network credit union board of
24directors shall require each advisory board member to sign a
25confidentiality or non-disclosure agreement to ensure that
26information concerning the credit union remains confidential.

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1 (d) The network credit union is the surviving legal entity
2in the merger and supervision, examination, audit, reporting,
3governance, and management shall be conducted or performed at
4the network credit union level. All share insurance, safety
5and soundness, and statutory and regulatory requirements and
6limitations shall be evaluated at the network credit union
7level.
8(Source: P.A. 99-614, eff. 7-22-16; 100-361, eff. 8-25-17.)

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1 INDEX
2 Statutes amended in order of appearance